This is a pretty sticky topic but it may be more accurate to turn the question on its head and ask how the Mahayana and Vajrayana become distinct traditions largely without reference to the Pali Canon. Let the controversy begin anew...

To avoid all evil, to cultivate good, and to cleanse one's mind — this is the teaching of the Buddhas.-Dhp. 183

"Life is a struggle. Life will throw curveballs at you, it will humble you, it will attempt to break you down. And just when you think things are starting to look up, life will smack you back down with ruthless indifference..."

That depends on who you ask. For example in the T'ien T'ai (Tendai) chronological categories, the Avatamsaka Sutra was taught first right after the Buddha achieved Enlightenment. Modern scholarship will disagree with this.

Theravada states that the first teachings was the Dhammacakkappavattana Sutta. So I guess it's important to ask from which view are you investigating this question.

Presumably when they felt the need to differentiate themselves from those who didn't?

Metta,Retro.

If you have asked me of the origination of unease, then I shall explain it to you in accordance with my understanding: Whatever various forms of unease there are in the world, They originate founded in encumbering accumulation. (Pārāyanavagga)

Exalted in mind, just open and clearly aware, the recluse trained in the ways of the sages:One who is such, calmed and ever mindful, He has no sorrows! -- Udana IV, 7

Probably when they realized that by just calling themselves "Buddhist" meant that they believed in everything that was classified as Buddhism; of which there was a great deal that they did not agree with.

...they had no problem when youngsters called them like that (let the elders...) and some days later they called themselves like that, with a kind of self-humor. With right view, critic can become a honor as well, but honor also leads easy back to pride. A turning wheel.

---The trouble is that you think you have time------Worry is the Interest, paid in advance, on a debt you may never owe------It's not what happens to you in life that is important ~ it's what you do with it ---

Anyone know what the very first Mahayana schools were called? Tibetan Buddhism came quite a bit after the mahayana sutra's were written, Zen had many different forms quite a bit fater the sutra's were written too.

"The original heart/mind shines like pure, clear water with the sweetest taste. But if the heart is pure, is our practice over? No, we must not cling even to this purity. We must go beyond all duality, all concepts, all bad, all good, all pure, all impure. We must go beyond self and nonself, beyond birth and death. When we see with the eye of wisdom, we know that the true Buddha is timeless, unborn, unrelated to any body, any history, any image. Buddha is the ground of all being, the realization of the truth of the unmoving mind.” Ajahn Chah